Friday, March 13, 2009

Another Paul Kanjorski Flip-Flop

Almost every time Paul Kanjorski speaks one needs to do research because it will prove he thinks seeing both sides means speaking out of both sides of his mouth.

In yesterday's New York Times Floyd Norris wrote If mark-to-market accounting is to blame for the current financial crisis, then the National Weather Service is to blame for Hurricane Katrina; if it hadn’t told us the hurricane hit New Orleans, the city would never have flooded.

This is the logic the bankers are using, and they are getting sympathetic ears in Congress. The bankers have gotten two members of Congress to introduce a bill to establish a new body that could suspend accounting rules for financial institutions.

On Thursday, members of a House subcommittee joined in demanding that the rules be suspended. It was a bipartisan lynching of the accounting rule writers.

The panel’s chairman, Representative Paul E. Kanjorski, Democrat of Pennsylvania, said the accounting rule “does provide transparency for investors,” but that “strict application” of the rule had “exacerbated the ongoing economic crisis.”

Then he issued the threat. “If the regulators and standard setters do not act now to improve the standards, then the Congress will have no other option than to act itself.”

Sadly, a victory for the bankers would not help them much. Even if it were true that banks would be held in higher regard now if they had not been forced to write down the value of their bad assets — and that is, at best, debatable — changing the rules now would be counterproductive. Would you trust banks more? Would other banks be more inclined to trust banks?

Marcy Gordon of the AP wroteThe threat of legislation was a reversal of stance for Kanjorski, who had previously said Congress shouldn't intervene in establishing accounting rules such as the mark-to-market standard now at issue.

Jon Stewart would have a field day with Paul Kanjorski after what he did to Jim Cramer. Paul told us there was no crisis at Fannie Mae or Freddie Mac. And this..well Paul I am not shocked. Put your brain in gear before you put your mouth in motion! You could be accused of misuse of power by means of the tongue. Verbal cannabalism is usually expressed as speech.

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